Young drivers: Cutting high car insurance costs
Everyone remembers the day they passed their driving test. Months of expensive lessons and cramming in the Highway Code made ripping up the L-Plates a very liberating experience indeed.
But for most newly-qualified drivers that exhilaration is usually short lived when the realities of being a fully-fledged motorist hit home and they are faced with the task of insuring their car.
For most young drivers this brings them down to earth with an almighty bump because premiums for young drivers are extremely high. And for men the hole burned in the pocket is even more substantial than for women.
Research by price comparison website, Moneysupermarket.com, showed the average premium in 2008 for an 18-year-old man was just over £2,200 per year.
This was £1,905 more expensive than the average motor insurance premium for a male driver in his 50s, which is £294 per year.
There's a very simple reason why new drivers pay more - the statistics show they have more accidents.
According the AA, one out of every five young drivers suffers a crash within their first year of driving.
And young drivers are also ten times more likely to be involved in a serious collision than older and more experienced motorists.
It means insurers, fearful their younger policyholders will make more claims, bump up their premiums to cover this.
But many industry experts feel this is unfair.
Earlier this year, at a conference by the Association of British Insurers, Simon Douglas, director of AA Insurance, called for young drivers, particularly those who proved they were making efforts to improve their driving standards, to be rewarded.
He said that while the figures showed young drivers were at greater risk on the roads, it didn't mean they were all more reckless or careless when behind the wheel.
Mr Douglas added: "Good, safe drivers should be rewarded and the insurance industry is well placed to provide incentives that encourage responsible driving."
In the meantime, however, what options to young drivers have if they wish to lower their premiums?
One common route, used by teenagers living at home in particular, is to drive their parents', or another older family member's, car.
This involves becoming a named driver on that person's insurance policy and therefore only paying a small additional sum in insurance.
On the plus side, the new motorist will be covered to drive a car legally without having an onerous financial burden to bear.
On the downside, however, it means they cannot build up their own driver insurance record, and will not be eligible to build up a no claims bonus, which helps reduce policies in the future.
And many young drivers find having to share a car with their mum, dad and siblings can cause all sorts of family feuds.
Having your own car certainly has its advantages. And it has emerged recently that many families have adopted a practice called fronting where the new driver has bought a car, is the sole or main user, but gets their parents to take out the insurance policy in their name.
The new driver is put down on the policy as a named driver and therefore does not have to fork out for a full insurance policy.
Money saving it might be, but it is also illegal and most insurers are now clamping down on this.
Steve Sweeney, head of motor insurance at moneysupermarket, said: "Those considering lying to their insurer to save money are playing a very risky game."
"If caught," he warned, "your insurance will be validated and a younger driver could face court, charged with driving without insurance."
Hayley Parsons, chief executive of another price comparison site, Gocompare, said it was also a false economy.
Many insurers, she explained, were now wise to the practice and had set their price according to the age of the youngest driver.
She added: "In the long run it is better for young drivers to hold insurance in their own name to build-up valuable no claims discount."
In fact many first-time drivers would rather fork out a bit more for the freedom of having their own car and insurance policy.
So, if you are determined to go it alone there are ways to reduce your premium.
Powerful cars are often more expensive to insure so buy, if you can, buy a vehicle with a smaller engine for your first few years on the road.
Many insurers will also look favourably upon drivers whose cars are more secure. So buying an alarm or an immobiliser will make your vehicle less alluring to thieves but more attractive to an insurer.
Young drivers who have completed Pass Plus, the advanced driving scheme run by the Driving Standards Agency (DSA), can also benefit from "substantial" discounts, according to the people behind the scheme.
But most insurance experts recommend shopping around as the most effective way of cutting costs.
As a young driver, you should get quotes from as many insurers as possible. The Association of British Insurers said people can save as much as 35 per cent by comparing just five insurance providers.
Use the internet too. According to Moneysupermarket you can often get better rates by buying your policy online as many insurers offer internet discounts.
In fact, using online price comparison websites is a popular and effective way to compare a number of car insurance deals and see how they match up to each other.
Hayley Parsons of Gocompare said young drivers were the most likely to use the website.
She added: "Young drivers rely on price comparison sites more than any age group as they have the most to save by shopping around."
However, when searching for rock bottom prices, young drivers should be careful not to sacrifice important features of a policy.
The AA's Simon Douglas warned: "It is important to compare the benefits and excesses - if you have to make a claim, that's the wrong time to discover that your insurance doesn't provide the level of cover you expect."
Kate Saines
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